What
comes after GDP?
Source: By ASHOK V. DESAI: The Telegraph
Governments want economic growth. Statisticians measure it, and economists define it for them: it is growth in the gross domestic or national product ( the difference is income from abroad, which for India is substantial thanks to the Indians working abroad and sending money to their waiting wives). This growth worship is, however, getting rather outdated. It started in the 1930s, after Colin Clark showed how to measure a country's national income; he made the first estimates of Britain's national income, to give a statistical backbone to John Maynard Keynes's theory of income determination.
It gathered strength after the world war, as capitalist countries vied to outdo the fastgrowing Soviet Union. Now even poor countries like India know how to estimate GDP; rich countries have achieved levels of GDP that they can be satisfied with.
One of them is Germany. For the last couple of months I have been living in the centre of Berlin. Every day I passed a shop which displayed some second- hand books, all priced at half a euro: that is as cheap as it can get. Thus I picked up a little book about the surprising number of French- sounding words in Berliner jargon. For example, when they take leave of you, Berliners say " Tschuess !" I had always thought that this was a dematerialized kiss.
The French airkiss both your cheeks when they said goodbye; I thought the Berliners had turned this airkiss into a lilting greeting.
But I was wrong; this chuce is Berlinerisch for a French adieu . Slightly over two centuries ago, Napoleon passed through Berlin with his million soldiers on the way to Russia. Before that, Prussia had kings of high culture, who spoke only French to their queens and courtiers. They could not do that to their hoi polloi , but even their German was laced with a generous dose of French. Chuce is a remnant of that affaire française . T he books were a side business of a shop which sold secondhand goods, mainly clothes, given by religious people to the evangelical church ( although it was Martin Luther, a German, who founded the Protestant church, the Germans do not call it that; they prefer to called it evangelisch ). It also ran a restaurant, or more precisely, a soup kitchen. It was closed all day. Then in the late afternoon, hungry men began to hover near it.
At six in the evening it opened its doors. For the next two hours it served a thick, meaty soup free. Germany is prosperous, and jobs are easy to get. But there are some people who cannot get jobs or manage somehow not to do one; they were served by the soup kitchen.
The members of German parliament, however, felt that Germany was rich enough, and that it was time to start thinking about what came next; they appointed a parliamentary committee to answer the question. Its report is a model of systematic analysis.
The committee distinguished between four types of indicators: of economic achievement and material welfare, quality of life, sustainability and resilience. It did not have much to say about resilience. It only distinguished between three types of crises calling for resilience: economic, natural, and epidemic. Its list of economic indicators would also be familiar: welfare as indicated by income, consumption and wealth per head, distribution of income and wealth, work force participation as indicated by unemployment, underemployment and longterm joblessness, economic insecurity as indicated by risks of poverty, unemployment, and fall in earnings or in pension, and distributive risks indicated by levels of taxes and social contributions.
It made an elaborate list of aspects of quality of life: workplace quality as indicated by security of employment, chances of promotion, degree of consultation and job satisfaction; social inequality as indicated by inequality of income and wealth, and social mobility; health as indicated by infant mortality, adiposity ( body mass index over 30), inoculations, lost years of life ( deaths under the age of 65 or 70), depression, suicide rate, and availability of medical facilities; education in kindergartens, schools, colleges and occupational training; personal, political, economic and religious freedom; democracy and participation; environmental quality as indicated by open spaces and opportunities for physical activity nearby; work- life balance as indicated by hours of work and social contacts; personal security as indicated by crimes, vandalism, corruption and traffic accidents; gender equality in employment and incomes; and social integration of immigrants and handicapped people.
It made an equally elaborate list for sustainability: economic sustainability as indicated by investment in physical and human capital as well as innovation; administrative sustainability as indicated by government intervention in markets, obstruction of economic activity, monopolies and cartels; external sustainability as indicated by external debt level; fiscal sustainability as indicated by fiscal deficit, debt level and liabilities that may arise in the future ( such as pensions); financial sustainability; ecological sustainability as indicated by natural resources and energy, land use, forests and biodiversity; and global sustainability as indicated by international cooperation, and rate of consumption of nonrenewable resources.
These long lists reflect the German view of human happiness as a function of over a hundred little things. This is all right for a government that wants more things to do, but it makes happiness quite a fragile state: if he is not entirely fulfilled in any of these dimensions, the German is apt to feel unhappy. The government may keep toiling in a hundred spheres, and yet find that its people are ever less happy. Surely there must be a shorter way to happiness.
M y own experience is that physical comfort is a necessary condition of happiness; and it closely depends on the old minima of food, clothes and shelter. The German soup kitchen is one solution to the food problem; but chiki , about which I wrote some weeks ago, is better. A sari is an excellent solution to the covering problem, but it cannot cover anyone; a tailor has to come into the picture.
But an aam admi's government can surely give everyone 10 metres of dark blue cloth a year, and let him find his own tailor; or better still, give Shoppers Stop a contract to give everyone two pairs of clothes a year free. Shelter is the most difficult problem since nowadays it must include water, power and sanitation. Pre- reform Indian governments' solution was basic flats in four- story buildings which did not require lifts. My view is that underground caves can be made more comfortable at lower cost.
Anyway, that is something on which populist types can work. But beyond material comfort lies mental well- being; that is more difficult. Most people, however, are happiest when they live in and with a family. The Indian joint family was a good institution in this respect; it created an environment for ample company, care and education.
It is perhaps too late for Germans to recreate it; they divorce so easily these days that they cannot even keep together nuclear families. But Scandinavian communities, in which a large number of people live together, mate with whom they like and look after all the children, are a European equivalent of joint family; the Germans should work on this solution and perfect it with their gründlich approach.
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